Burkina Faso is taking significant steps to assert greater control over its rich mineral resources. The country has officially increased its government equity stake in major gold mining projects from 10% to 15%, aligning with its new Mining Code adopted in August 2024. This change aims to enhance national revenue and ensure that more benefits from gold mining flow directly to the country.
A Strategic Move for Resource Sovereignty
Burkina Faso, currently ranked as Africa’s fourth-largest gold producer, relies heavily on gold, which accounts for over 70% of its export earnings. By raising its stake in key mining assets without incurring additional costs, the government is strengthening its position to benefit more from its mineral wealth. This move is part of a broader effort to maximise the economic gains from natural resources and promote resource sovereignty.
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The adjustment affects several prominent projects, including the Sanbrado, Kiaka, and Toega mines operated by West African Resources, an Australia-listed company. Following discussions with the government and other industry stakeholders, West African Resources agreed to the new terms, which do not alter the existing contractual arrangements apart from the increased state equity.
Impacts on Mining Agreements and Operations
The change means that Burkina Faso’s government now holds a larger, free-carried interest in these projects, allowing it to earn a bigger share of the profits without additional expenditure. West African Resources’ Chairperson, Richard Hyde, affirmed that the company’s 2025 production targets—between 190,000 and 210,000 ounces of gold at a cost of less than $1,350 per ounce—remain on track. He also highlighted that construction at the Kiaka project is progressing smoothly, with the first gold pour expected early in the third quarter.
Reform Driven by National Interests
Since Captain Ibrahim Traoré assumed power in 2022, Burkina Faso has prioritised resource sovereignty, emphasising that its citizens should benefit more substantially from the country’s mineral wealth. The adoption of the new Mining Code marks a decisive step in this direction, raising the state’s free-carried interest from 10% to 15%. The reform aims to shift more benefits to Burkina Faso’s economy by increasing the government’s stake in mining operations.
Historically, foreign companies from countries such as Canada, Australia, and the UK have dominated Burkina Faso’s gold sector. While these companies have contributed capital and expertise, the majority of profits have been repatriated, with limited direct benefits for local communities. The revised Mining Code seeks to change this dynamic by ensuring that the government has a more substantial and cost-free stake in mining projects, fostering greater transparency and equitable benefits.
Broader Context and Industry Response
Burkina Faso’s mining sector reforms reflect a growing trend across Africa towards securing fairer deals, increasing national benefit, and ensuring that natural resources serve the broader interests of local populations. The move also aligns with international calls for greater transparency and accountability in resource management.
West African Resources and other industry players have expressed support for the new regulations, recognising that these reforms can foster a more equitable and sustainable mining sector. The government’s focus on resource sovereignty aims to balance foreign investment with national interests, creating a framework that benefits both investors and citizens alike.
Looking Ahead
As Burkina Faso continues to develop its mining industry under the new Mining Code, the country is positioning itself to capitalise more effectively on its mineral wealth. The increased government equity stake signals a commitment to ensuring that natural resources translate into tangible benefits for the nation, promoting economic stability and local development.
With ongoing investments and reforms, Burkina Faso’s gold sector is set to play a crucial role in the country’s economic future, exemplifying a broader shift towards resource nationalism and fairer resource management across Africa.
